I’m worried, frankly, about the long-term effect of the steep drop in the price of oil. Lower prices at the pump – some places are registering under $2 a gallon for the first time in years – could cause rising fuel consumption, especially if motorists in America and elsewhere are tempted to buy SUVs and other less-fuel-efficient vehicles. That, of course, will lead to more greenhouse-gas emissions, worsening the impact of climate change. At the same time, policy leaders may lose interest in seeking to spur new investment in wind, solar, or other badly needed types of alternative energy. Some experts have suggested raising taxes on gasoline during this moment of low prices – to pay for badly needed infrastructure – and that’s not a bad idea.
But there’s also some undeniably good fallout from the plunging cost of crude, at least for now. The last decade of mostly high oil prices has ushered in an era of risky, and environmentally disastrous, extreme oil exploration. We’ve seen the impacts here at home – most famously in the Gulf of Mexico, where BP’s efforts to drill in one mile of deep water led to the 2010 spill of roughly 5 million barrels of crude. But across America, the boom in fracking – using new technology to free up oil and gas that was once trapped in small pockets within shale formations – was also driven by high prices and high demand. Quite simply, sustained low prices will mean that Big Oil can’t afford the most risky, most expensive and most dangerous practices. There’s little doubt that low fuel prices helped New York Gov. Andrew Cuomo take the bold move to ban fracking in his state.
But the Lower 48 isn’t the only site of risky, extreme drilling. Indeed, there’s no more foolhardy, and dangerous, untapped oil deposits than those beneath the frigid waters and ice floes of the Arctic Ocean. In the last several years, when oil was above $100 a barrel, the oil giants were determined to push the envelope of Arctic drilling, even though an accident in these nearly unmanageable conditions would trigger an ecological disaster. These weekend, the New York Times Magazine provides an amazing recap of what exactly went wrong when it brought its colossal deep-sea rig the Kulluk to the waters off Alaska a couple of summers ago:
Even with permission, getting to the oil would not be easy. The Alaskan Arctic has no deepwater port. The closest is in the Aleutian Islands at Dutch Harbor, a thousand miles to the south through the Bering Strait. In the Inupiat whaling villages dotting the Chukchi coast, only a handful of airstrips are long enough for anything other than a prop plane. There are few roads; human residents get around in summer by boat, foot or all-terrain vehicle. Shell was trying the logistical equivalent of a mission to the moon. During the short Arctic summer, when the sea ice made its annual retreat, Shell would have to bring not only the Kulluk but everything else: personnel, tankers, icebreakers, worker housing, supply vessels, helicopters, tugboats, spill-cleanup barges and a secondary rig to drill a relief well in case of a blowout. In the wake of Deepwater Horizon, Shell would build a $400 million Arctic-ready containment dome, an extra layer of spill protection that it would also need to drag north.
By 2012, Shell had become the largest company in the world. It had $467.2 billion in revenue and 87,000 employees in more than 70 countries. It was on track to spend $6 billion preparing for Arctic Alaska, and that March the Obama administration approved exploratory drilling. The task that remained was not to tame the frontier so much as to bring it within reach, to bind Arctic Alaska to the rest of the world. Shell imagined a future of new ports, new airports and permanent rigs. Squint your eyes and you could see all the lines being drawn. Shell’s Arctic program looked much like the Kulluk itself: something massive at the end of a long thin line.
What happened next, as recounted in this must-read article, was an almost a comical series of mishaps, including an accident which caused the $400 million containment dome to get crushed, like a beer can, in a matter of seconds. In the end, Shell drilled just two small test wells, not even deep enough to extract oil. And frequent mishaps and difficulties kept delaying the planned move of the Kulluk to safer waters until the dead of winter. The article vividly chronicles the series of screw-ups that led to a dramatic rescue of the Kulluk’s crew:
One by one, the Kulluk’s crew were hauled up. Most were calm. But the rig rose up and gave the basket a bump just as one man was being lifted off the deck. “This guy’s a little nervous,” Smith said. “He’s got a death grip.” Cooley looked down and saw his face. “I’m seeing the reality,” he told me. “This guy is scared.” They pulled him into the helicopter and sat him on the floor. Four hours after the rescue crews arrived, they plucked the final man off the Kulluk and flew back to base.
Efforts to save the rig were unsuccessful, and it was finally cut loose:
He watched the Kulluk on the radar. It started out slow, but let loose from its tether, it accelerated. It hit the gravelly shore 45 minutes later. Waves crashed over its hull, the wind kicked up a spray and the shoreline was soon littered with the Kulluk’s lifeboats and life jackets and hundreds of little silver packets of drinking water meant for men lost at sea. There was no spill. In the early hours of New Year’s Day, the Coast Guard flew over the wreck. In aerial photos published around the world, the rig was dwarfed by the auburn, grass-covered hills of the uninhabited island where it had finally come to a rest.
The incredible kicker to this story is that the wreck of the Kulluk didn’t crush the dreams of Shell, or rival companies, to drill for oil in the inhospitable waters of the Arctic. It was only been in the last month or so, with falling prices, that plans for risky exploration in the seas off Alaska and off Russia have been put on hold, for the time being. In other words, the only thing that changes the behavior of Big Oil is not the safety of its workers or the environment, but just the Almighty Dollar. Hopefully our leaders can use this interlude to impose more sensible energy policies, so that a nightmare like the wreck of the Kulluk will never happen again.
To read the riveting New York Times Magazine article about the wreck of the Kulluk, go to: http://www.nytimes.com/2015/01/04/magazine/the-wreck-of-the-kulluk.html?hp&action=click&pgtype=Homepage&module=photo-spot-region®ion=top-news&WT.nav=top-news
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